RICS continues its worldwide push with global board apointment
The Global Valuation Professional Group Board (GVB), which is part of the Royal Institution of Chartered Surveyors has appointed its first chair based outside of the UK.
Mike Steur, who is based in Sydney, Australia, said that the priority areas are addressing the needs of business valuers, capping liability for valuers in some markets and on improving risk management.
However, perhaps the most significant initiative the board is undertaking is the regulation and registration of valuers, which is compulsory in the UK and in some European markets.
‘This process will lead to greater market confidence in the use of the expert RICS registered valuer, particularly in the highly visible capital markets and mortgage lending sector across the world,’ explained Steur.
The GVB informs RICS’s global valuation work. The board was instrumental in aligning the RICS valuation codes with the International Valuation Standards (IVS) and embedding the mandatory RICS Valuation Professional Standards (the 'Red Book') across global markets.
Steur, who is from New Zealand, has more than 30 years in the property business. His career spans almost all property types in New Zealand, Australia and in Asia, including Hong Kong, China, Japan, Malaysia and Singapore.
The GVB comprises of member representatives from diverse global locations and professional specialisations. It also includes practicing academics to ensure appropriate understanding and responsiveness to member needs.
In recent years RICS has been shifting its focus beyond the UK to regions around the world and established itself as a leading professional body in land, real estate, construction and infrastructure in financial capitals around the world.
This latest appointment is part of continuing the RICS evolution as a global standard setting organisation.
Steur said he has identified a range of opportunities and challenges that affect RICS members across the valuation landscape, explaining that some markets still provide for unlimited liability for valuations and this could be addressed by implementing market accepted capping schemes that are appropriately linked to standards and governance through RICS regulation and registration.
Valuers in certain global markets are requested to provide verbal valuations prior to an instruction to prepare a written valuation. This market practice could potentially lead to optimistic valuations being written.
The lack of independence in instructing a valuer is still common practice in some global markets. Behaviourally, this can lead to coercion of the valuer and, again, potentially optimistic or pessimistic valuations. Other examples include a potential conflict of interest, where a lending manager whose remuneration is linked to successful loan advances, has the ability to instruct the valuer.
Also, where a fund manager whose remuneration are linked to asset performance instructs the valuer. Although many of the highly reputable property funds do not permit this practice and some markets have addressed this through regulation or independent panel appointments, this practice is still a major concern to the valuation profession.
In some markets, regulatory authorities allow valuation certificates only for Initial Public Offerings (IPOs). In those markets, it is almost impossible to examine the accuracy of such valuations. Full explanatory valuations should be mandatory for any IPO and the investing public should have the ability to scrutinise such valuations.
‘On a global basis, we have a long way to go to address these issues across markets. RICS has a vital role to play in this through setting and maintaining best practice as well as providing the appropriate guidance,’ Steur concluded.
